Ministries can146;t build

The numbers are scary enough 8212; 66 per cent jump in cost, thanks to Central government project delays, as reported by this newspaper on Wednesday. But the actual numbers are scarier. There is a cost of the opportunity lost for the economy in terms of higher incomes, jobs, and growth in other sectors that would have come had power projects started working, railway tracks been laid, mining technology improved, etc. These costs, if estimated, would be a huge multiple of the current cost. That reinforces the assumption that nothing can be done. That government is a blackhole that will swallow all project implementation plans. That is not quite true. Something can be done. More, it is already being done.

Look at the relatively successful projects. The national highway building plan or the Delhi metro. The key difference is that they are not being run by ministries. The administrative jargon for the body that runs them is special purpose vehicles SPVs. These are given the responsibility, funds and required powers to implement a specific project. The National Highway Authority of India NHAI was created to implement the fast track road building. Contrast NHAI8217;s relative success with the record of the Pradhan Mantri Gram Sadak Yojana. It is general administration-run and has achieved only 24 per cent of its target. The Delhi metro is being built by DMRC, which was given professional autonomy. The Kolkata metro was the responsibility of the railway ministry. The difference in how the two metros were built is probably the most instructive lesson for those looking to cost project delays. Perhaps learning from this, Lalu Yadav, whose ministry specialises in project delays, has created an SPV for the Delhi-Mumbai-Chennai-Kolkata freight corridor. This is the model the government must follow.

But just because ministries are impossible to reform in terms of project implementation culture doesn8217;t mean they should have no accountability on money spent. P. Chidambaram8217;s idea of an outcome budget is an attempt to ask ministries and departments the relevant questions. But 8220;outcome8221; hasn8217;t yet been defined in a clear and quantifiable manner. Ministries have given laundry lists of money spent on various projects. That says nothing about physical progress or economic viability. The finance minister may like to think of linking allotments to clear answers.